Schizophrenia is a devastating psychiatric condition that affects up to 1% of the US population. During the previous funding period, we reported that a loss of hippocampal interneuron function, recapitulates the hyperdopaminergic state thought to underlie psychosis in patients. In addition, we have recently provided one of the first reports describing the feasibility of interneuron transplants (derived from fetal medial ganglionic eminence) as a novel therapeutic approach for the treatment of schizophrenia. In these initial studies we focused primarily on the hyperdopaminergic state thought to underlie psychosis. In the present proposal, we will now address the issues of negative and cognitive deficits that are not only severely debilitating, but are not well treated by antipsychotic medications. Towards this end, we plan to examine the role of two separate interneuron populations, namely parvalbumin and somatostatin, in discrete but interconnected neuronal systems (the vHipp and mPFC) that likely underlie these symptoms clusters in schizophrenia. More broadly, this concept is central to understanding dimensions of behavior and neurobiological measures as detailed in the Research Domain Criteria project (RDoC). Taken together, the studies proposed will provide an understanding into the role of discrete interneuron populations in the pathophysiology of schizophrenia and will examine the utility of stem cell transplants as a potential treatment for this disease.